European Commission Releases Pharmaceutical Anti-Competition Report

The European Commission has released a report summarizing the European Commission and the national competition authorities’ work to enforce European Union antitrust and merger rules in the pharmaceutical space.  The report notes that, by monitoring the pharmaceutical market to ensure that price competition for pharmaceuticals is not artificially reduced or eliminated, and that anti-competitive practices do not restrict innovation in the sector, the European competition authorities hope to increase consumer access to cheaper medicines.

The report states that, between 2009 and 2017, European competition authorities investigated over 100 cases and reviewed more than 80 transactions to safeguard effective competition in pharmaceutical markets.  The authorities targeted conduct that had limited the market entry of generics and the expansion of generics, including so-called “pay-for-delay” deals, where the branded company made a payment to a generic company with a delayed generic market entry date.  The Commission has also intervened in mergers that could lead to price increases due to the strengthened pricing power of the merged company and has prevented transactions that might have threatened the release of new medicines or of lower-cost generics or biosimilars.  For example, in Pfizer’s acquisition of Hospira, Pfizer acquired the rights to Hospira’s infliximab biosimilar Inflectra®.  The Commission was concerned that such a merger would decrease competition in the biosimilar field, as Pfizer might abandon its own infliximab biosimilar project once it controlled Inflectra®.  To mitigate the Commission’s concerns regarding competitiveness in the biosimilar field, Pfizer and Hospira proposed that Pfizer divest its infliximab biosimilar pipeline to another company, a solution that the Commission accepted.